Summary
JPMorgan Chase & Co. (JPM) announced on February 4, 2014, a significant settlement with the United States Attorney’s Office for the Southern District of New York, along with the Federal Housing Administration (FHA), the U.S. Department of Housing and Urban Development (HUD), and the U.S. Department of Veterans Affairs (VA). This agreement resolves claims related to the firm's involvement in federal mortgage insurance programs administered by these agencies. The settlement involves a cash payment of $614 million and a commitment from JPMorgan Chase to improve its quality control procedures for future loans submitted to the FHA’s Direct Endorsement Lender program. Importantly, this agreement provides the firm with a release from civil and administrative liabilities under the False Claims Act, FIRREA, and other statutes concerning FHA and VA insurance claims paid to JPMorgan Chase since 2002 up to the settlement date. The company believes it is adequately reserved for this settlement and anticipates no material financial impact from future claims.
Key Highlights
- 1JPMorgan Chase reached a $614 million settlement with several U.S. government agencies (SDNY, FHA, HUD, VA) concerning federal mortgage insurance programs.
- 2The settlement resolves claims related to JPMorgan Chase's participation in FHA, HUD, and VA mortgage insurance programs.
- 3The company will pay $614 million in cash as part of the settlement.
- 4JPMorgan Chase has agreed to enhance its quality control program for future loans submitted to the FHA's Direct Endorsement Lender program.
- 5The settlement provides a release from civil and administrative liability for FHA and VA insurance claims paid since 2002.
- 6The firm believes it is fully reserved for the settlement amount.
- 7JPMorgan Chase anticipates no significant financial impact related to exposure on future claims.